Evolutionary reform a tad slow for some

As if Labor rottweiler Stephen Conroy’s relentless attacks on the company weren’t enough, there are whispers within
Telstra
’s top ranks that their agreeable, urbane CEO is, well, a tad indecisive.

Yesterday’s management shake-up is partly an effort by Thodey to show who’s in charge. Out goes
Justin Milne
, the respected BigPond boss; in comes outsider Gordon Ballantyne and upwards go high-fliers
Kate McKenzie
and Robert Nason.

The decision to put one executive, McKenzie, in charge of product, pricing and promotion is sensible. Telstra has moved to market with new prices and bundles at an embarrassingly glacial pace in the past 12 months.

In the meantime,
iiNet
and
TPG
have snaffled price-conscious punters in fixed-line broadband and Optus has snared the lion’s share of high-spending iPhone users with fat, cheap data packages.

Cutting out the layers of bureaucracy that have slowed Telstra’s time to market will give it a chance to compete more effectively, which it desperately needs to do, as evidenced by Thodey’s three (count ’em) revenue warnings.

Some will say the changes have not come soon enough, pointing to the fact that Thodey’s previous shake-up, in November, had only added to gridlock in the decision making process.

But the changes are all part of a longer term plan by Thodey, or as the company puts it, “the next step in the evolution of Telstra’s operating structure".

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It’s all about “evolution" under Thodey, which is why some of those executives who enjoyed and endured the revolutionary zeal of his colourful predecessor, Sol Trujillo, might find the new pace of progress frustrating at times.

Doubtless they are also concerned at the state of their options (under water) and the fact that, barring a miracle, they won’t get much in the way of short or long-term incentive payouts this year.

That’s hardly all Thodey’s fault: Telstra is, like all former telecom monopolies, being hammered in the fixed-line market as more people go exclusively mobile or keep their lines but make fewer calls on the old-fashioned home phone. The structural headwinds make Trujillo’s exit look increasingly well timed.

The revolution is coming anyway, of course, in the form of Conroy’s national broadband network, which will supplant Telstra’s fixed-line monopoly.

Huge uncertainty over the outcome of Telstra’s talks to transfer its customers to the NBN, and over Conroy’s threat to break Telstra up if it doesn’t, has saddled Thodey from day one.

In that context, yesterday’s changes are welcome progress. But Thodey needs a good result on the NBN, or else a credible plan B, to secure a long-term stint as CEO.